Working overtime can be a great way for people to earn extra money without getting second jobs or part-time gigs. But is it worth it?
Adding a couple of hours to your work schedule to get some extra cash can be good, but it can also set your career goals back and even impact your health. Overtime isn’t for everyone, so you need to determine if it’s the right fit for you.
In this article, we will discuss what overtime is and when working overtime is not worth your time and effort.
What is Overtime Work?
Working overtime refers to working extra hours within a pay period for increased pay. According to the Fair Labor Standards Act, any employee who works over 40 hours in a single workweek must earn overtime pay. After working standard 40 hours, an employee starts earning at the rate of one and a half times their regular pay rate for every extra hour worked. This type of pay is also known as ‘time and a half.’
The standard work week is typically divided into shifts of eight hours, spread out over five days of the week. Suppose an employee has a standard work schedule and wants to earn overtime pay. In such a case, they need to ask their employer if they could start early, work weekends, or do extra work after regular hours. The more time an employee spends working overtime, the more money they will earn.
During job interviews, candidates should check if their potential employer offers overtime hours. Otherwise, employees who want to work overtime should talk to the HR department and see their options in this matter.
Can An Employer Limit Overtime Hours?
When it comes to overtime work, employers have the power to decide if they want to allow this option and, if so, how much. On the other hand, employees have the ability to control granted overtime by the hour. The important thing for an employee who wants to work overtime is to ensure they are on the same page with their employer.
When companies schedule working hours for their employees, they almost always have an overtime option in mind. However, if an employer doesn’t allow overtime, they must be careful about how many hours they schedule for workers. Sometimes, an employer may even change a schedule mid-week to dodge unwanted overtime.
For instance, an employee was scheduled to work five shifts of eight hours during the work week but ended up working four shifts of ten hours. In such a case, an employer may say that the employee doesn’t need to work that fifth shift. Some employees might see this as a good thing while others may feel cheated out of extra money. Contrary to this, some jobs allow people to work whatever hours they desire, such as delivery or Uber drivers.
Can Overtime Pay Affect Employee’s Tax Bracket?
As an employee works overtime, their earnings are taxed just like the rest of their paycheck, with a slight difference. Overtime pay is taxed at a marginal tax rate, which is the total taxes paid on any extra income. While an employee pays more taxes on overtime income, they still end up with more money than they would if paid at their regular rate.
How much overtime an employee works will determine whether or not they qualify for a higher tax bracket. If they consistently work more hours, their total income will increase. The higher their income, the more likely they may pay more in state and federal taxes. But, given the average tax rate, they would have to work exceedingly long hours to move to a higher tax bracket from overtime pay alone.
When Is Working Overtime Not Worth It?
There are several instances when working overtime is not good for you. They are:
1. When You’re Working Overtime Without Pay or Any Other Benefit
Some companies in industries that are exempt from overtime pay stipulations pay based on results, not caring if it takes an employee 40 or 50 hours to produce those results. Consequently, employees may work however many hours it takes them to finish the task. This can be problematic when employers have unreasonable expectations that can’t possibly be met within a standard 40-hour work week. They may promise promotions or raises, but these often don’t happen. Even when they do, they may amount to much less than an employee would earn if their employer paid them fairly.
2. When You’re Still Overspending
Once that extra money starts pouring in, an employee might start spending more than they normally do. Excess spending is actually a common thing when a person is faced with a sudden surplus of cash. If you catch yourself doing this, working overtime might not be for you.
3. When Your Physical and Mental Health is Affected
Although it pays more, working overtime can affect your health. When you work more than what your body can take, you are risking burnout. If you’re already working eight hours and decide to work three or four hours more, it can add to health issues such as back pain, dry and itchy eyes, headaches, insomnia, depression, anxiety, and more.
4. When Your Personal Life is Affected
Apart from your professional life, you also have a personal life that requires equal attention. So, if you’re not taking care of yourself, not spending enough time with your friends and family, not having any hobbies, or not working out, then you’ve lost your work/life balance.
5. When Your Performance is Jeopardized
It is natural that you lose focus and can’t concentrate on work after you’ve exploited yourself for too long. The human brain also gets tired and needs some downtime. When you’re constantly working without properly resting, you stop performing at your best, which further leads to frustration and anger.
6. When Pending Work Starts Piling Up
When the work is done under too much pressure, it yields poor results. Your pace slows down, which leads to more pending work. When the pending work starts piling up, you need to work extra hours the next day and the day after. This is a vicious cycle that is difficult to break out of.
Conclusion
There are a number of factors you need to consider when working overtime. It can be beneficial to your budget, but it can also heavily affect your health and your personal life. On the other hand, companies may risk losing a perfectly good team member due to employee burnout. That’s why it is important to weigh the values of your current life stage against the desire to earn more money.
Sometimes, your employer may refuse to pay your overtime despite your hard work and dedication. However, not paying for all the hours worked or failing to pay the legally required overtime is punishable by law.
To find out whether you have a case worth pursuing, feel free to contact Cilenti & Cooper today. We treat every case with the attention and care it deserves and can fight for your rights from beginning to end. We offer a free consultation to all of our prospective clients, so you have nothing to lose.